Banks need part-time help to fix a big-time problem: branch costs disproportionate to a dwindling number of customer visits.
As account holders increasingly migrate online, full-time workers are that much more idle, but with locked-in wage costs and benefits.
"It is safe to say there is an increased reliance on part time," said Terry Moore, the managing director of the North American banking practice at Accenture. "Part time allows you that flexibility" to meet changing consumer demands.
The move is an about-face considering part-timers were among the first layoffs prompted by the financial crisis. But banks and their customers are wedded to branches for certain activities, and if banks can't close them down, they can at least limit their adverse effects on the bottom line.
That means the type of workers banks could spare as the economy collapsed — homemakers and students with time to work flexible hours — are becoming more valuable as it recovers.
People still want a place to open an account or ask for advice about saving for college, even though they're doing more banking online. Yet banks didn't build a lot of branches in the last 10 years primarily to meet those needs, experts said.
Most of the roughly 98,500 bank branches in the U.S. were made for cashing Friday's paycheck: Think rows of teller stations and some semiprivate cubicles off the lobby. The financial justification for that kind of operation is deteriorating. Banks are making less money servicing deposits. New restrictions block the rich overdraft charges they used to get.
"Branches were initially designed to basically get checking accounts. They were funded by the fee business," said Darryl Demos, a managing director with the consultancy Novantas who advises large and midsize banks on branch operation.
"The fee business goes away," he said. "You have to take a long, hard look at your franchise. … To drive down the cost we need to go to variable staffing."
Banks generally don't disclose staffing details, and several declined to comment for this story.
PNC Financial Services Group Inc., for one, reported in October that the percentage of part-time help in its retail bank has been rising modestly but steadily this year. About 18.5% of its roughly 26,000 retail workers were part time at the end of September, up from 18.3% in June and 18.2% in March.
Demos said his clients are rattled by what's happening at branches, which tend to account for more than half of expenses.
People are going into them less, but industry research shows consumers want lots of branches. It's the No. 1 factor they weigh when picking a bank.
The average bank branch booked fewer than 9,000 transactions a month in the first half of 2010, Demos said. During the first six months of 2007, the per-branch transaction average was more than 10,000, according to his firm's in-house surveys and client data.
The average is on track to fall below 8,000 in 2013, Novantas said.
Branch-visitation data from Huntington Bancshares Inc. sheds additional light.
In September the Columbus, Ohio, company said that 72% of its business customers visited one of its 600-plus branches in the last 30 days.
The share was 64% for consumer customers and 76% for private banking.
The takeaway from all this data is that branches are being used less often and for different reasons. So paying three or four people to work eight-hour shifts handling transactions makes less sense, especially with technology simplifying the teller's job. Check-processing machines and automatic kiosks are eliminating the need for cash drawers and the handling of paper money.
"What I think more banks are going to do is hire more part-time people. They'll staff up over lunch and late" afternoons, said Robert Meara, a consultant with Celent who advises large and midsize banks on branching issues. Those are the hours that tend to be the busiest.
They'll have skeleton crews at other times, he said. There will be fewer full-time tellers and more sales-oriented staff to handle customers who still go to branches frequently: people from small and midsize businesses and wealth management clients.
If that all sounds simple, it isn't.
The changes involve people and infrastructure. Banks have to decide which locations to remodel and outfit with teller-replacing technology. Old branches need to be outfitted with more private rooms. That's not cheap.
Finding good people is the trickiest part of any business enterprise.
Finding reliable part-timers can be tough, especially when they have to be adept at multiple tasks like processing transactions and fielding service questions. Temporary employees are not what banks are looking for, either, because they need permanent, properly trained workers.
"Teller staffing is sort of an age-old art and science," Moore said. "The problem with part time is you can run into trouble on the service. … You have to be real careful not to suffer on the quality side."
The advantage of part-time workers is that they are cheaper than regular employees, because they get fewer benefits. And they are paid only when they are needed.
Good ones are hard to find and hold on to.
That is not really an issue today, as the job market is flooded with willing workers.
"Longer-term, it is going to be difficult to find someone that is quite good, particularly people that are good at engaging people and selling stuff," Meara said.
So bringing more of them on board involves rebooting old staffing programs, which takes time.It also means letting go of full-time staff, or cutting their hours.
This is why there is more talk than action at this point when it comes to part-time hires.
Demos said one of his large-bank clients (which he wouldn't name) is planning to increase its part-time help, currently about 15% of its head count, to 25-30%.
